China has finally agreed to initiate the process of opening up the pharmaceutical market for Indian companies. It has also promised to enhance buying to correct the trade imbalance caused by low Indian exports.

Chinese leaders including premier Wen Jiabao on Tuesday indicated to visiting Indian commerce minister Anand Sharma that Beijing was prepared to revise its overall approach to trade with India. Wen went to the extent of saying that healthy trade growth was essential for developing strong strategic relationship.

Sharma told Chinese commerce minister Chen Demin that New Delhi has amended visa rules on foreign workers on the basis of requests made by Beijing. Though the rules apply to companies from all companies, it is the Chinese firms that will gain most as they are usually keen to send out more workers.

The new rules make it possible for a foreign company to dispatch 40 workers for each project in India as compared to the old limitation of 20 workers. But the number of foreign workers still cannot exceed one per cent of the total number of workers employed in a project.

Indian pharmaceutical companies have been complaining of non-tariff barriers making it difficult for them to distribute medicine products in China. Chinese leaders said on Tuesday that there would be a lot of scope for Indian companies to market products as the country’s health delivery system was being hugely expanded.

“The minister did some plain talking. The Chinese leaders saw the point and even appreciated some of it,” an official involved with the talks told TNN.

The Indian side Chinese industry enjoyed a huge amount of free access to Indian markets and have profited in terms of major contracts for machinery and project installation. It was time China reciprocated and allowed similar access to Indian goods and services, they said.

Sharma was obviously playing on the Chinese desire to expand project exports to India, which has grown significantly with huge buying by the Indian power and steel sectors in recent years. Chen asked Sharma to facilitate further growth of this trend.

The Indian minister also pushed Chinese officials to arrange buying of high technology products including those produced by power equipment makers like L&T. This is significant in view of stinging criticism by L&T chief, A.M.Naik, who has been opposing dumping by Chinese power equipment makers in the Indian market.

Chinese leaders seemed a little less enthusiastic about opening up the market for information technology services and exports of food products for Indian companies.

The Indian minister also pressed for removal of tariff and non-tariff barriers on import of Basmati Rice, fruits and vegetables by China, landing rights for Indian TV channels in China, and import of more Indian films by China. He said there are procedural bottlenecks like time consuming licensing procedures being faced by Indian drugs and pharmaceuticals.

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